Chronic lung disease (CLD) is a frequent complication of prematurity, resulting in increased health care costs, prolonged hospital stay, frequent rehospitalizations, and compromised growth and development. Early treatment with dexamethasone may decrease CLD; however, this therapy has serious immediate and long-term adverse effects. Lung inflammation is a prominent early finding in the development of CLD. At the same time, many small premature infants show biochemical evidence and clinical signs consistent with adrenal insufficiency in the first week of life. Based on the hypothesis that early adrenal insufficiency results in amplified responses to inflammatory stimuli, and other physiologic disruptions, leading to ongoing lung injury and CLD, a randomized, blinded, placebo-controlled pilot study of 40 extremely low birth weight infants (ELBW, 500-999 g birth weight) was conducted. This study showed that hydrocortisone prophylaxis against adrenal insufficiency during the first two weeks of life resulted in a significant increase in survival without chronic lung disease. No increases in adverse outcomes were noted; however, the pilot study was not powerful enough to rule out a Type II error. Based on that hypothesis and pilot study, this application proposes a multicenter, randomized trial of 712 ELBW births, to further define the benefits and assess the risks of hydrocortisone prophylaxis against adrenal insufficiency in these infants. Primary outcome measures will be (1) benefit: increased survival without CLD at 36 weeks postmenstrual age; (2) risk: no increase in cerebral palsy at 18 22 months adjusted age. Other measures of neurodevelopmental outcome will also be assessed. The sample size will detect a change of 10 percentage points in successful outcome, and in the incidence of specific adverse effects, with a power of 80%. The hydrocortisone dose will be 1mg/kg/day for 12 days (equivalent to <10% of the typical starting dexamethasone dose), then 0.5mg/kg/day for 3 days. Baseline data on mother and infant, daily clinical data for the first 28 days of life, outcome data at 36 weeks postmenstrual age, and outcome data at 18 - 22 months adjusted age will be collected. Cortisol and cytokines (IL-1B, 1L6, and ILS) will be assayed at baseline and at 6 days of life. After therapy, cortisol response to ACTH will be assayed. If this study confirms the benefits seen in the pilot study, it will result in a significant improvement in health care for premature infants, both by introducing a beneficial new therapy, and by avoiding higher dose dexamethasone.